Thoughts on Trump's trade war "success", what British history can teach America, the EU's problem with China, the unstoppable rise of renewables, and the prize for Britain's worst chancellor
I think you're _far_ too kind to Osborne. His position was heterodox from day 1 and (as I'm sure you're well aware) all based on the flawed Reinhardt and Rogoff paper that he used to justify all his decisions. He was deliberately damaging the economy in ways that he knew, full well, would cause the problems that we're seeing today.
Having said that, Hunt does edge it out over him because of all the reasons you're described.
I agree that Osborne's policy was heterodox, but the deficit did need to be tackled. The political debate at the time was how quickly and the balance between tax rises and spending cuts. As I say in the post, I think got it wrong on both counts. But if Brexit hadn't delivered a second shock the economy, he might have had a chance to rectify some of his mistakes. More broadly, I think Osborne's slogan that he was a "fiscal conservative but a monetary activist" was moronic but has sadly come to frame the UK economic policy debate ever since, with disastrous consequences.
Especially given, as you and other posters have noted, we were in a period of zero interest rates, so he could have borrowed more for investment to build out infrastructure and grow the economy.
Surely the ‘prize’ must go to Osbourne. Besides being a nasty vindictive individual (e.g. summary removal of the fictitious spare room allowance causing a host of difficulties for those impacted) he demonstrated a complete lack of imagination when he had a golden chance to stimulate the economy. This is because money was so cheap and the UK could have rapidly profited from investment achieved through additional borrowing (which would have helped the UK brace itself against Brexit). Even before Brexit the UK GDP was underperforming in the G7.
There's no question that Osborne's decision to cut back investment was ill-judged as even his most loyal defenders would now admit. In fact, he implicitly acknowledged it himself towards the end of his time as CX when he lifted investment spending - though nowhere near as much as he could or should
Agree on the Hunt critique. Politics played as a game - “aren’t we clever to have laid this trap….” Surely the job is to pass on the best possible economy to your successor.
Surely, being on a shortlist of worst Chancellor is enough of an accolade for Hunt, Kwarteng or Osborne. These three were clearly not up to the job of running (or was it ruining?) the UK economy, and their all their names should be dirt.
This is an old unconscious media bias: rehabilitate the elder statesmen if they look sensible, reasonable, approachable, 'smarter than the current lot' in their dotage (not that Hunt has reached that stage yet). See Nixon and Kissinger. Both GW Bush and Trump I were terrible, but how is it that Bush is now given a pass when he caused so much more mayhem and durable damage? Behaves like a gentleman, seems like devoted family man, etc.
That's an interesting perspective. I have had some discussions with readers offline as to whether it is a particularly British phenomenon, whereby the media and public are willing to indulge behaviour in those with the right accents for which those with less privileged backgrounds would be pilloried. But you are right to remind us that it happens elsewhere!
I think that intermittency is becoming a stale argument. A better criticism of the figures is that the cost of renewables does not include the cost of extra infrastructure in the form of transmission and storage. But most western countries require massive investment to upgrade grid infrastructure anyway - and supposed alternatives to renewables such as nuclear will also require new grid connections, albeit not until any new nuclear is built, which could be another 30 years...
Simon, excellent as always. I agree that Trump's treatment of US allies is nasty, brutish and short-sighted. However, we should not fall into the trap of thinking that when the US snubs Europe, it shows short-sighted strategic weakness, but when China does it, it shows far-sighted strategic strength. No doubt Asia keeps rising. But if China's strategy is to bet on closer ties with Africa and Latin America, I think Europe and the US have plenty of time to see sense and rebuild closer ties with each other.
Thanks Marco. I completely agree. That was the thread that I had hoped was running through the newsletter so thanks for drawing it out so clearly. Europe and the US will both pay a high price if they do not work together to counter China in the battle for the hearts and minds of the Global South
I think you're _far_ too kind to Osborne. His position was heterodox from day 1 and (as I'm sure you're well aware) all based on the flawed Reinhardt and Rogoff paper that he used to justify all his decisions. He was deliberately damaging the economy in ways that he knew, full well, would cause the problems that we're seeing today.
Having said that, Hunt does edge it out over him because of all the reasons you're described.
I agree that Osborne's policy was heterodox, but the deficit did need to be tackled. The political debate at the time was how quickly and the balance between tax rises and spending cuts. As I say in the post, I think got it wrong on both counts. But if Brexit hadn't delivered a second shock the economy, he might have had a chance to rectify some of his mistakes. More broadly, I think Osborne's slogan that he was a "fiscal conservative but a monetary activist" was moronic but has sadly come to frame the UK economic policy debate ever since, with disastrous consequences.
Fair points...
Especially given, as you and other posters have noted, we were in a period of zero interest rates, so he could have borrowed more for investment to build out infrastructure and grow the economy.
As Reeves is doing now, under far less propitious circumstances…
Surely the ‘prize’ must go to Osbourne. Besides being a nasty vindictive individual (e.g. summary removal of the fictitious spare room allowance causing a host of difficulties for those impacted) he demonstrated a complete lack of imagination when he had a golden chance to stimulate the economy. This is because money was so cheap and the UK could have rapidly profited from investment achieved through additional borrowing (which would have helped the UK brace itself against Brexit). Even before Brexit the UK GDP was underperforming in the G7.
There's no question that Osborne's decision to cut back investment was ill-judged as even his most loyal defenders would now admit. In fact, he implicitly acknowledged it himself towards the end of his time as CX when he lifted investment spending - though nowhere near as much as he could or should
Agree on the Hunt critique. Politics played as a game - “aren’t we clever to have laid this trap….” Surely the job is to pass on the best possible economy to your successor.
If he had an ounce of patriotism then yes
It is notable that the two (if not three) worse chancellors were Tories and were deeply impacted by Brexit.
Which, in many ways, is a neat summary of UK politics since 2010
Surely, being on a shortlist of worst Chancellor is enough of an accolade for Hunt, Kwarteng or Osborne. These three were clearly not up to the job of running (or was it ruining?) the UK economy, and their all their names should be dirt.
This is an old unconscious media bias: rehabilitate the elder statesmen if they look sensible, reasonable, approachable, 'smarter than the current lot' in their dotage (not that Hunt has reached that stage yet). See Nixon and Kissinger. Both GW Bush and Trump I were terrible, but how is it that Bush is now given a pass when he caused so much more mayhem and durable damage? Behaves like a gentleman, seems like devoted family man, etc.
That's an interesting perspective. I have had some discussions with readers offline as to whether it is a particularly British phenomenon, whereby the media and public are willing to indulge behaviour in those with the right accents for which those with less privileged backgrounds would be pilloried. But you are right to remind us that it happens elsewhere!
Maybe it's to consciously or subconsciously resolve potential guilt issues regarding their support at the time
the "renewables are cheap" numbers usually ignore interminency.
they do pretend to account for average cost etc. but usually do the numbers in a dishonest way
not much different from Trump trade theories, in fact.
I think that intermittency is becoming a stale argument. A better criticism of the figures is that the cost of renewables does not include the cost of extra infrastructure in the form of transmission and storage. But most western countries require massive investment to upgrade grid infrastructure anyway - and supposed alternatives to renewables such as nuclear will also require new grid connections, albeit not until any new nuclear is built, which could be another 30 years...
Simon, excellent as always. I agree that Trump's treatment of US allies is nasty, brutish and short-sighted. However, we should not fall into the trap of thinking that when the US snubs Europe, it shows short-sighted strategic weakness, but when China does it, it shows far-sighted strategic strength. No doubt Asia keeps rising. But if China's strategy is to bet on closer ties with Africa and Latin America, I think Europe and the US have plenty of time to see sense and rebuild closer ties with each other.
Thanks Marco. I completely agree. That was the thread that I had hoped was running through the newsletter so thanks for drawing it out so clearly. Europe and the US will both pay a high price if they do not work together to counter China in the battle for the hearts and minds of the Global South
Too soon to see the impact. There will definitely be an impact. Both short run and long run.
Absolutely right on Hunt, and I'm very surprised there haven't been more people saying it to his face on his book tour.
So basically you are saying I should stick £20 on him being the next Tory leader?
Worse. And two-faced.